(LSE:
APAX)
Apax Global Alpha
Limited
Full year results for the year ended 31
December 2023
Apax Global Alpha (LON:APAX), the closed-ended
investment company providing access to the Apax Private Equity
Funds, today announced its full year results for the year ended 31
December 2023.
Key
highlights
·
|
AGA's Adjusted
NAV1 was €1.29bn
(FY22 €1.30bn) in 2023, equivalent to an Adjusted NAV per share of
€2.62/£2.27. Movement in Adjusted NAV was driven by an increase in
NAV of the Debt and Private Equity portfolios, offset by €65m of
dividends paid to shareholders and FX movements.
|
·
|
Total NAV Return2 was 4.1% (6.1% constant currency), with
significant return contribution from the Debt portfolio, a unique
feature of AGA which absorbs capital not invested in Private Equity
to generate returns and income.
|
·
|
Private Equity performance was
primarily driven by earnings growth across the underlying portfolio
companies, with average LTM EBITDA3 growth of 18.0% at
31 December 2023, broadly in line with the prior year (FY22
18.5%).
|
·
|
AGA received €90m in distributions
from the Apax Funds during the year, including from six full exits
achieved at an average uplift of 20%4.
|
·
|
During 2023, AGA deployed c.€95m on a
look-through basis across ten new investments5. The
majority of this capital was invested in the second half, as the
outlook improved, and more compelling opportunities
emerged.
|
·
|
Consistent with previous periods, and
in the context of the Private Equity commitments made by AGA and
future calls, the Debt portfolio maintained a greater exposure to
first lien loans. The portfolio achieved a Total
Return2 of 11.8% in the year (14.4% constant currency).
|
·
|
During 2023, and in light of the
increasing share price discount to NAV, the Board undertook a
detailed review of the Company's capital allocation policy. No
change was made, but a key priority was reaffirmed to ensure
continued cash returns to shareholders via regular dividends. The
Board is pleased to have now returned c.€444m, or c.50% of the
original IPO NAV, to shareholders in this way and has determined a
final dividend of 5.64 pence per share for 2023, expected to be
paid on 4 April 2024.
|
·
|
Post year-end, on 1 March 2024, Karl
Sternberg joined the Board as a Non-Executive Director. It is
intended that he will replace Tim Breedon as Chairman in the second
half of 2024. Concurrent with Karl's appointment, Chris Ambler
retired as a Director on 1 March, after nearly nine years in the
role.
|
Tim
Breedon CBE, Chairman of Apax Global Alpha, said:
"Over the past five years AGA has delivered an average Total
NAV Return of nearly 13% p.a. and returned more than €300m in
dividends to shareholders. The NAV contribution from both the Debt
and Private Equity portfolios against the more challenging economic
backdrop of 2023 highlights the strength of the Company's strategy.
With investment activity in Private Equity ramping up in the second
half of the year, there is strong momentum across the portfolio,
with Apax's focus on driving performance through operating value
creation being well suited in current markets."
Financial highlights
·
|
AGA was 93% invested as at 31
December 2023 and had unfunded commitments to the Apax Funds
(together with recallable distributions) of €919m, reducing by
c.€86m from 31 December 2022: (c.€1.0bn).
|
|
|
·
|
At 31 December 2023, AGA's
invested portfolio was split 74% in Private Equity and 25% in Debt
Investments, with the remaining 1% invested across three Derived
Equity positions.
|
·
|
At the period end, AGA had €94m in cash
(including net current assets) in anticipation of capital calls
from Apax XI, ADF, and AGI and the dividend payable in Q1
2024.
|
·
|
On 5
September 2023, AGA entered into a new multi-currency revolving
credit facility of €250m with SMBC Bank International plc and
JPMorgan Chase, N.A., London Branch, replacing the
facility
with Credit Suisse AG, London Branch. The new facility was undrawn
as at 31 December 2023.
|
|
FY 2023
(EUR)
|
FY 2023
(GBP)
|
FY 2022
(EUR)
|
FY 2022
(GBP)
|
Adjusted NAV1
|
1,288m
|
1,116m
|
1,299m
|
1,150m
|
Adjusted NAV1 per share
|
2.62
|
2.27
|
2.65
|
2.34
|
NAV1 per share
|
2.64
|
2.28
|
2.65
|
2.34
|
|
% of NAV
|
FY 2023
|
FY
2023 constant
currency
|
Total NAV
Return2
|
|
4.1%
|
6.1%
|
Total Return2 - Private
Equity
|
69%
|
2.4%
|
4.5%
|
Total Return2 - Debt
Investments
|
23%
|
11.8%
|
14.4%
|
Total Return2 - Derived
Equity
|
1%
|
14.8%
|
16.8%
|
Cash & Others
|
7%
|
|
|
Portfolio highlights
·
|
AGA offers access to a global portfolio of
mostly private companies that are not available to public market
investors elsewhere.
|
·
|
The invested portfolio is well diversified
across the four Apax sectors with Tech & Digital (41%) making
up the largest exposure, followed by Services (27%), Healthcare
(15%), and Internet/Consumer (17%) at 31 December
2023.
|
·
|
The Private Equity portfolio is balanced across
Apax Fund vintages, with 40% in the investing phase, 38% in the
maturity phase, and 22% in the harvesting phase.
|
·
|
In the Private Equity portfolio, valuation
multiples decreased slightly from 17.2x to 16.6x at 31 December
2023, having already readjusted from the peak in December 2021.
Most of the decline was due to negative movements from the Apax
Funds' listed holdings which represented c.7% of the Private Equity
portfolio at 31 December 2023. Average leverage reduced to 4.6x net
debt / EBITDA at year-end (FY22: 4.8x).
|
·
|
Capital not invested
in Private Equity is primarily invested in Debt Investments to
absorb excess liquidity not invested in Private Equity, thereby
limiting cash drag, producing additional returns, and enhancing the
robustness of AGA's balance sheet.
|
·
|
Over the last five
years, the Debt portfolio has achieved a 45.9% cumulative constant
currency Total Return, versus 32.5% for the S&P/LSTA Leveraged
Loan Index in the same 5-year period6.
|
·
|
AGA invested €45.2m
across four new Debt positions and received €100.6m from ten full
and partial disposals.
|
·
|
AGA still has a small
exposure to Derived Equity, and following the sale of two positions
in 2023, AGA currently holds three positions valued at
€15.6m.
|
|
|
For further information regarding the
announcement of AGA's FY 2023 Results, including the
Company's results presentation and details for
today's analyst and investor webcast at 9.30am (UK time), please
visit
www.apaxglobalalpha.com.
Contact details
Katarina Sallerfors,
Investor Relations - AGA
|
Telephone:
+44 207 666 6526
|
Email:
Katarina.sallerfors@apax.com
|
|
|
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APPENDIX
Movements in
Adjusted NAV
Adjusted NAV movements (€m)
|
Private
Equity
|
Debt
Investments
|
Derived
Equity
|
Cash
|
Treasury Shares/ Facility
drawn
|
Other7
|
Total
|
Adjusted NAV at 31.12.22
|
871.0
|
340.6
|
23.5
|
68.0
|
-
|
(3.7)
|
1,299.4
|
+ Investments
|
89.7
|
45.2
|
-
|
(128.1)
|
-
|
(6.8)
|
-
|
- Distributions/
divestments
|
(90.4)
|
(100.6)
|
(10.6)
|
202.2
|
-
|
(0.6)
|
-
|
+ Interest and dividend
income
|
-
|
-
|
-
|
31.2
|
-
|
6.3
|
37.5
|
+/- Gains/(losses)
|
-
|
17.2
|
3.0
|
-
|
-
|
-
|
58.6
|
+/- FX
gains/(losses)8
|
38.4
|
(8.2)
|
(0.3)
|
0.3
|
-
|
-
|
(26.2)
|
+/- Costs and other
movements
|
(18.0)
|
-
|
-
|
(6.9)
|
-
|
(2.9)
|
(9.8)
|
- Dividends paid
|
-
|
-
|
-
|
(65.3)
|
-
|
-
|
(65.3)
|
+/- Performance fee
reserve9
|
-
|
(6.0)
|
(0.6)
|
-
|
-
|
-
|
(6.6)
|
+/- Shares purchased
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
+/- Revolving credit
facility
drawn/repaid
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Adjusted NAV at 31.12.23
|
890.7
|
288.2
|
15.0
|
101.4
|
-
|
(7.7)
|
1,287.6
|
Private Equity
- operational metrics
Private Equity - operational
metrics
|
31 December
2023
|
31 December
2022
|
Portfolio year-over-year LTM revenue
growth3
|
12.1%
|
21.5%
|
Portfolio year-over-year LTM EBITDA
growth3
|
18.0%
|
18.5%
|
Enterprise Value / EBITDA valuation
multiple3
|
16.6x
|
17.2x
|
Net debt / EBITDA
multiple3
|
4.6x
|
4.8x
|
|
|
|
| |
Debt
Investments - operational metrics
Debt Investments -
operational metrics
|
|
31 December
2023
|
31 December
2022
|
Debt
average yield to maturity
|
|
12.0%
|
12.1%
|
Debt
average years to maturity
|
|
4.4
|
5.1
|
Debt
average income yield
|
|
10.4%
|
9.9%
|
Other Invested
Portfolio highlights
Invested Portfolio
analysis10
|
€m
|
€m
|
%
|
%
|
-
AEVI
|
2.3
|
|
0%
|
|
-
AEVII
|
25.2
|
|
2%
|
|
-
AVIII
|
60.9
|
|
5%
|
|
-
AIX
|
268.0
|
|
22%
|
|
-
AX
|
447.3
|
|
37%
|
|
-
AXI
|
4.1
|
|
0%
|
|
-
AMI
|
14.9
|
|
1%
|
|
-
AMI
II
|
(0.5)
|
|
0%
|
|
-
ADF
|
53.6
|
|
5%
|
|
-
ADF
II
|
8.9
|
|
1%
|
|
-
AGI
|
6.0
|
|
1%
|
|
Private Equity
|
|
890.7
|
|
74%
|
Debt Investments
|
|
294.2
|
|
25%
|
Derived Equity
|
|
15.6
|
|
1%
|
Total
|
|
1,200.5
|
|
100%
|
Footnotes
|
|
1
|
Adjusted
NAV reflects Total NAV of €1,294.2m less performance fee reserve of
€6.6m
|
2
|
"Total NAV
Return" means the movement in the Adjusted NAV per share over the
quarter plus any dividends paid. "Total Return" reflects the
sub-portfolio performance on a stand-alone basis. It excludes items
at the overall AGA level such as cash, management fees, and
costs
|
3
|
Gross Asset
Value weighted average of the respective metric across the
portfolio. LTM Revenue growth and LTM EBITDA growth rates exclude
companies where EBITDA is not meaningful such as financial services
or high growth business with fluctuations in EBITDA. Net
debt/EBITDA multiple and EV/EBITDA valuation multiple relating to
portfolio company debt excluded companies where EBITDA is not
meaningful such as financial services or high growth business
valued on a revenue basis.
|
4
|
Valuation
uplifts on exits are calculated based on the total actual or
estimated sales proceeds and income as appropriate since the last
Unaffected Valuation. Unaffected Valuation is determined as the
fair value in the last quarter before exit, when valuation is not
affected by the exit process (i.e. because an exit was signed, or
an exit was sufficiently close to being signed that the Apax Funds
incorporated the expected exit multiple into the quarter end
valuation). Where applicable, average uplifts of partial exits and
IPO's includes proceeds received and the closing fair value at
period end. Private Equity Aggregate Gross IRR and Gross MOIC
calculated based on the expected aggregate cash flows in euro
across all funds for the deals signed and/or IPO'd in the period.
Gross IRR represents concurrent Gross IRR.
|
5
|
Represents
AGA's look-through cost to investments acquired by the Apax Funds
during FY 2023. For Apax Funds which are yet to hold their final
close, these amounts remain subject to change due to equalisation
adjustments
|
6
|
Debt
Investments constant currency returns and S&P LSTA leveraged
loan index rebased to 100 and compounded on a quarterly basis.
Bloomberg source for S&P LSTA leveraged loan index
|
7
|
Other
reflects net current assets.
|
8
|
FX on cash
includes the revaluation of cash balances and net gain or losses
arising from the differences in exchange rates between transaction
dates and settlement dates, and unrealised net gains or losses
arising from the translation into euro of assets and liabilities
(other than investments) which are not denominated in
euro
|
9
|
Movement in
the performance fee reserve reflects the performance fee reserve
accrued by the Company's at 31 December 23. This does not represent
the underlying Private Equity portfolio's carried
interest.
|
10
|
Invested
Portfolio excludes cash and cash equivalents, revolving credit
facility drawn and net current assets, including these the NAV was
€1,294.2m and Adjusted NAV was €1,287.6m reflecting adjustment of
€6.6m for the estimated performance fee reserve accrued.
|
|
|
Notes
1.
|
Note that references in this
announcement to Apax Global Alpha Limited have been abbreviated to
"AGA" or "the Company". References to Apax Partners LLP have been
abbreviated to "Apax" or "the Investment Adviser"
|
2.
|
Please be advised that this
announcement may contain inside information as stipulated under the
Market Abuse Regulations (EU) NO. 596/2014 ("MAR")
|
3.
|
This announcement is not for release,
publication or distribution, directly or indirectly, in whole or in
part, into or within the United States or to "US persons" (as
defined in Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act")) or into or within
Australia, Canada, South Africa or Japan. Recipients of this
announcement in jurisdictions outside the UK should inform
themselves about and observe any applicable legal requirements in
their jurisdictions. In particular, the distribution of the
announcement may be restricted by law in certain
jurisdictions
|
4.
|
The information presented herein is
not an offer for sale within the United States of any equity shares
or other securities of Apax Global Alpha Limited ("AGA"). AGA has
not been and will not be registered under the US Investment Company
Act of 1940, as amended (the "Investment Company Act"). In
addition, AGA's shares (the "Shares") have not been and will not be
registered under the Securities Act or any other applicable law of
the United States. Consequently, the Shares may not be offered or
sold or otherwise transferred within the United States, or to, or
for the account or benefit of, US Persons, except pursuant to an
exemption from the registration requirements of the Securities Act
and under circumstances which will not require AGA to register
under the Investment Company Act. No public offering of the Shares
is being made in the United States
|
5.
|
This announcement may include
forward-looking statements. The words "expect", "anticipate",
"intends", "plan", "estimate", "aim", "forecast", "project" and
similar expressions (or their negative) identify certain of these
forward-looking statements. These forward-looking statements are
statements regarding AGA's intentions, beliefs or current
expectations concerning, among other things, AGA's results of
operations, financial condition, liquidity, prospects, growth and
strategies. The forward-looking statements in this presentation are
based on numerous assumptions regarding AGA's present and future
business strategies and the environment in which AGA will operate
in the future. Forward-looking statements involve inherent known
and unknown risks, uncertainties and contingencies because they
relate to events and depend on circumstances that may or may not
occur in the future and may cause the actual results, performance
or achievements of AGA to be materially different from those
expressed or implied by such forward looking statements. Many of
these risks and uncertainties relate to factors that are beyond
AGA's ability to control or estimate precisely, such as future
market conditions, currency fluctuations, the behaviour of other
market participants, the actions of regulators and other factors
such as AGA's ability to continue to obtain financing to meet its
liquidity needs, changes in the political, social and regulatory
framework in which AGA operates or in economic or technological
trends or conditions. Past performance should not be taken as an
indication or guarantee of future results, and no representation or
warranty, express or implied, is made regarding future performance.
AGA expressly disclaims any obligation or undertaking to release
any updates or revisions to these forward-looking statements to
reflect any change in AGA's expectations with regard thereto or any
change in events, conditions or circumstances on which any
statement is based after the date of this announcement, or to
update or to keep current any other information contained in this
announcement. Accordingly, undue reliance should not be placed on
the forward-looking statements, which speak only as of the date of
this announcement.
|
About Apax Global Alpha
Limited
AGA is a Guernsey registered
closed-ended investment Company listed on the London Stock
Exchange. It is regulated by the Guernsey Financial Services
Commission.
AGA's objective is to provide
shareholders with capital appreciation from its investment
portfolio and regular dividends. The Company is targeting an
annualised Total Return, across economic cycles, of 12-15% (net of
fees and expenses) including a dividend yield of 5% of Net Asset
Value.
The Company makes Private Equity
investments in Apax Funds, and has a portfolio of primarily Debt
Investments, derived from the insights gained via Apax's Private
Equity activities.
Further information regarding the
Company and its publications are available on the Company's website
at www.apaxglobalalpha.com.
About Apax Partners
LLP
Apax Partners LLP ("Apax") is a
leading global private equity advisory firm. For over 50 years,
Apax has worked to inspire growth and
ideas that transform businesses. The
firm has raised and advised funds with aggregate commitments of
more than $65 billion. The Apax
Funds invest in companies across four
global sectors of Tech, Services, Healthcare, and
Internet/Consumer. These funds provide long-term equity financing
to build and strengthen world-class companies. For further
information about Apax, please visit www.apax.com.
Apax is authorised and regulated by
the Financial Conduct Authority in the UK.